Credit Suisse’s American Clients Await Results of Tax Prosecutions – Los Angeles Income Tax Planning & Income Tax Litigation Attorney Bruce Givner

by Bruce Givner on March 27, 2014

For the past three years, American tax authorities have conducted a probe into foreign banks searching for American tax evaders. Credit Suisse, the largest of the 14 Swiss banks under criminal investigations for helping Americans cheat the Internal Revenue Service, has come under the spotlight due to recent Congressional subcommittee hearings.

At the end of April, US senators took umbrage at the Justice Department’s progress, finding fault with the fact that the names of only 238 of 22,000 Americans with Credit Suisse accounts have been secured. The senators said that the bank had helped these Americans hide as much as $10 billion from the IRS. This pressure from the subcommittee is expected to motivate prosecutors to act more aggressively as they negotiate with Credit Suisse to end the probe and receive more names.

The Chief Executive Officer of Credit Suisee, Brady Dougan, apologized during his testimony at the Senate hearing, stating that a small group of Swiss-based bankers had broken US law and fooled top managers. By way of defending itself, the bank’s General Counsel Romeo Cerutti explained that Credit Suisse began slashing its list of American clients back in 2008, and that the remaining 3,500 clients all comply with current US tax laws.

However, these arguments held little weight with Sen. Carl Levin (D-Mich.), chairman of the Permanent Subcommittee on Investigations. While criticizing the bank for its lack of accountability regarding its past, the senator also had pointed remarks for the Justice Department. Specifically, Sen. Levin faulted the prosecutors for relying too heavily on requesting names under a US-Swiss tax treaty which he said is a “highly restrictive, maddeningly slow and unproductive process.”

In recent days, a former employee of Credit Suisse pleaded guilty to his role in a fraud scheme that helped American taxpayers hide as much as $3 billion in assets from the IRS. Andreas Bachmann, 56, is one of 8 former employees charged in 2011 and is the first to be arrested and plead guilty. Deputy Attorney General James Cole believes this event will help spur action on other cases in the coming months: “Today’s plea is just the latest step in our wide-ranging investigations into Swiss banking activities and demonstrates the Department of Justice’s commitment to global enforcement against those that facilitate offshore tax evasion.”

Throughout the three year probe, many bank customers chose to voluntarily come forward and reveal their hidden accounts to American tax authorities. All told, the Offshore Voluntary Disclosure Initiative led more than 43,000 Americans to tell the IRS about their offshore accounts and pay back taxes and penalties in exchange for avoiding prosecution.

Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, estate planning, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles, Orange, Ventura, San Bernardino, Riverside and Santa Barbara Counties. Call Los Angeles Estate Planning and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.

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